Leader of the House, Chris Bishop and PM Christopher Luxon leave their first post Cabinet press conference yesterday.

Prime Minister Christopher Luxon has confirmed that it will be back to the future on planning legislation.

This will be just one of a number of moves which will see the new government go backwards as it repeals and cost-cuts its way into power.

They will completely repeal one of the biggest and most comprehensively consulted pieces of legislation from the last government, the Natural and Built Environments Bill and the Spatial Planning Act.

It will be replaced with the widely condemned 1991 Resource Management Act with a new fast-track addition.

What is not all clear is what will happen after that, how they will draft a new Act to replace the RMA, and how long that process might take.

It took six years to get the legislation that is now about to be repealed drawn up and passed.

All Prime Minister Christopher Luxon would say yesterday was that “when we make decisions and come to a new place on it, you will see it.

But can I just say, I reckon people who want to actually build stuff in this country will like it?”

So he indicated yesterday that the first move, before Christmas, would be to repeal Labour’s resource management legislation.

Standing alongside Luxon, RMA Minister Chris Bishop said that it would then go back to the RMA 1991.

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“That’s the intent of the legislation,” he said.

“The intention is to reverse what the last government rammed through just before the election and go back to the status quo ante as it was prior to September 2023.”

That legislation contains a clause that requires  that “ all persons exercising functions and powers under it, in relation to managing the use, development, and protection of natural and physical resources, shall take into account the principles of the Treaty of Waitangi.”

The problem with that is that New Zealand First’s coalition agreement with the government says that the parties have agreed to “conduct a comprehensive review of all legislation that includes “The Principles of the Treaty of Waitangi” and replace those references “with specific words relating to the relevance and application of the Treaty or repeal the references.”

NZ First leader Winston Peters, asked last night whether he would be able to support the 1991 clause, replied (by text): “Just a tad of logic aligned with future chronology leading to a replacement law makes matters clear.”

Pressed whether the government would include the clause, Bishop reaffirmed his intention to return to the RMA, 1991.

“We’re going back to May 1991, and ministers in due course will be making decisions around fast track consenting, and there’s also other commitments in both Coalition documents to replacement legislation for the RMI, and again, ministers will be considering that n due course and we will have further announcements to make.”

The RMA legislation is one of a number of repeal Bills that the new government will present to Parliament, the first of which will be a simple one to remove the clause that requires that one of the Bank’s main objectives is to support maximum sustainable employment.

This was inserted by Finance Minister Grant Robertson in 2018.

But yesterday, under its current remit, which includes sustainable employment, the Bank maintained the Official Cash Rate at 5.5 per cent.

Even though it didn’t raise the rate it had bad news for the incoming government.

It has been steadily raising its OCR forecasts through the year and is now forecasting rates in 2026 when the next election is due to begin the year at 4.6 per cent, one per cent of its May forecast.

Yesterday, Luxon blamed the outgoing government for the inflation the Bank was trying to reign in with the OCR.

“It was incredibly disappointing to see the Reserve Bank having to say we might have to take interest rates higher, essentially because of the abysmal economic management of the last Labour Government,” he said.

“I want to be crystal clear about that; you know, there has been economic vandalism on a scale that we have not seen.

“And so what we need to do is actually make sure that we’re going through removing the waste.“

POLITIK PM Christopher Luxon and Leader of the House, Chris Bishop face their first post Cabinet press conference yesetrday

However, the Reserve Bank’s Monetary Policy Statement blamed not only government spending but, more importantly, immigration for it having to keep OCR rates higher for longer.

“One of the reasons that we have a higher profile (of the Official Cash Rate)  is because we have more spending and investment relative to what we had anticipated from the budget,” Reserve Bank Governor Adrian Orr told a press conference yesterday.

“But the bigger driver of it is actually the total level of spending in the economy, and that is largely driven by the growth in the population.

“So we’re in a really challenging period for monetary policy where per capita consumption is actually declining.

“But overall, consumer spending is rising because there are more people, more New Zealanders.”

On Tuesday, Luxon and Finance spokesperson Nicola Willis met with Orr and Treasury Secretary Caralee McLiesh and their top officials.

“The vibe in the room was incredibly constructive and highly focused on the job in hand,” said Orr.

“And the number one job on hand for us is to reduce inflation.”

Willis, however, emerged from the meeting to claim on AM yesterday that there would be a number of “nasty financial surprises” revealed when the government opened the books at the Half Yearly Economic and Fiscal Update.

“It’s things like projects completely blowing out in cost, not having been well managed, things that have been committed to with the government not putting enough money in there to actually meet the commitment into the future,” she said.

The Treasury maintains an ongoing list of risks facing the government, published in the two annual Economic and Fiscal Updates.

Most of the new risks identified in the Budget Update related to the weather events earlier in the year but also included the uncertainty about the future of the Chateau Tongariro hotel, the new interisland ferries, and the shortfall in the National Land Transport Fund.

The Lake Onslow pumped hydro scheme was also listed, but National plans to cancel that.

Other risks identified earlier included several Education initiatives, Auckland Light Rail, and Let’s Get Wellington Moving, along with a number of housing programmes and reduced revenue because of the failure of the government to sell any ETS units at auctions so far this year.

Outgoing Finance Minister Grant Robertson has been quick to point out in recent days that there are more holes in National’s fiscal plan with the announcement that they will now backdate the ability to make interest payments on rental properties tax deductible.

Labour leader Chris Hipkins said that would cost another $900 million.

Robertson believes it is shortfalls like that which have provoked Willis to claim there is a blowout in the books.

“I think she’s looking for excuses,” he said yesterday.

“National has an enormous fiscal hole.

“They cannot pay for the tax cuts that they promised New Zealanders.”

What is clear is that something is causing National to be even more emphatic in its call for savings in government expenditure.

“He (Reserve Bank Governor Adrian Orr) can only go so fast if we don’t have our fiscal situation system under control,” said Luxon.

“And that’s why we need to go through government spending, will have a very big focus on that.”

So Luxon’s term as Prime Minister begins by accentuating the negative with spending cuts and legislation repeal.

We have yet to learn when the new government will start implementing many of the ideas in the coalition documents. But the answers yesterday suggested we may need to wait a while.